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March 9, 2010
News : New franchises will make profits - Lalit Modi
News : Pune and Kochi unveiled as new IPL franchises
News : Five bids in fray for two new franchises
News : IPL defers unveiling new franchises to March 21
News : Two new franchises to be unveiled on Sunday
News : New IPL franchises to be revealed on March 7
News : $225m base price for two new IPL franchises
Audio/Video: 'Happy with a six-week IPL window'
Players/Officials: Shashank Manohar
The BCCI president Shashank Manohar's strong objection to the controversial clauses in the tender process on Sunday, the day the two new owners for the fourth IPL season were to be unveiled, is believed to be the prime reason for the auction being be postponed to March 21. Reportedly, Manohar made it clear that the IPL, despite its unprecedented success, was merely a BCCI sub-committee with the board president in charge.
Speaking to the Indian Express, Niranjan Shah, the vice-chairman of the IPL governing council, said, "The [BCCI] president felt a few clauses were too stiff and he wanted some modifications. Since the president's approval is necessary for going ahead with the process and naming the winning bids, the entire process was cancelled and we asked for fresh tenders, which will now be opened on March 21.
"The tournament has been launched under the BCCI banner and the committee, which runs the tournament and sets the rules and regulations for the franchises, is formed by the cricket board. The BCCI is the final authority in all cricket-related matters in the country. It is mandatory to have the BCCI president's approval before the IPL committee decides on anything."
Unlike the first season, the bidders for the new franchises had to establish that their net worth was $1 billion. An advance guarantee of $100 million as well as a rolling bank guarantee for the sum of the winning bid had to be provided as well. The clauses had forced some big names, including the MCC and Muthoot Group, to back out from the bidding process, leaving just two serious bidders - the Adani Group and Videocon - in the race.
Manohar wanted more parties to be involved in the process and proposed that the tender clauses be scrapped altogether. The bids were not opened and were returned to the bidders. Lalit Modi, the IPL commissioner, had no option but to drop the contentious clauses in the invitation to tenders, though the floor price to bid for a franchise - $225 million - was retained.
The re-tendering process is believed to have irked the bidders as well. A consortium comprising the Videocon group, led by Venugopal Dhoot, Panchshil Realty's founder chairman Atul Chordia and the Bollywood couple of Saif Ali Khan and Kareena Kapoor, may opt out of the bidding process the second time, having been keen on purchasing a franchise in Pune.
"We had a very good consortium between me, Saif, Kareena and Videocon," Chordia told the Hindustan Times. "Our mood is off now, I don't think it will happen now. For the last eight days, we have worked so hard on it - things like branding, merchandising, paper work."
"When the BCCI have an efficient team with eminent lawyers and businessmen, why did they put stringent conditions in place and then take a U-turn? There were three legitimate bids. I just can't understand the motive behind this.
"They just cancelled the bid without giving any reason. We were completely legitimate, we had completed all the paper-work, we had fulfilled all the conditions. If they didn't want a stringent tender, why did they float one in the first place? The manner in which it was done was not at all sporting."
Chordia proposed that instead of rebidding, the IPL should have cancelled the tenders if they didn't want to open them. "The minimum valuation was $225 million, which is about Rs 1,100 crore. So we had definitely put at least Rs 1,100 crore. We must have spent more than Rs 10 crore to get everything organised."
© ESPN EMEA Ltd.
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